Bee Examines Collapse of Medicare+Choice in Rural California Counties

The Sacramento Bee yesterday examined the effect that the exodus of managed care organizations from Medicare+Choice has had on seniors in rural areas of California. In the past three years, 14 counties "lost their last Medicare HMO," leaving more than 11,000 California residents without "any managed care option and bringing to 23 the total number of counties without these health plans." According to the California HealthCare Foundation, withdrawals in other counties have forced at least 100,000 additional California seniors to find new health plans. Several thousand additional seniors nationwide will likely lose supplemental Medicare coverage next year. Insurers have until Sept. 17 to announce whether they will cover beneficiaries in certain markets in 2002. The Bee reports that the exit of MCOs from Medicare+Choice has "hit hardest" seniors in rural counties -- where health plans participating in Medicare+Choice have raised premiums and reduced benefits the most. Although federal lawmakers increased payments to Medicare HMOs in rural areas in the 1997 Balanced Budget Act, many seniors and managed care officials complain that they also enacted regulations that "prevented health plans from signing up seniors who live outside the HMOs' federally approved service areas." The policy, which the Bee reports was developed to shield seniors from long travel times to hospitals, has prevented some seniors from remaining in their health plans after they become eligible for Medicare, the Bee reports. Denise Hanson, director of Medicare for Kaiser Permanente in California, said, "It's confusing, and it's frustrating. The best thing the government could do would be to allow folks who live on the fringes outside the service area to enroll" (Rapaport, Sacramento Bee, 9/9).